Home Equity Line of Credit: the Facts
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If you need some extra money to make a large purchase, renovate your home, or pay off a high-interest credit card, a HELOC (home equity line of credit) may be just what you need. A kind of revolving credit, a HELOC is secured by the equity in your home. This is an open ended of loan that can be paid down or charged up for the a set length of time, similar to a credit card. The rate of interest can fluctuate (generally monthly).
The lender will specify your credit limit (the maximum amount you may borrow) in the HELOC. Your credit score, salary, debt and various other financial information will determine your credit limit. You will be required to have a home appraisal to assess your home's present market value. Your credit limit will be based considering all of the above, as well as a fraction of your home's appraised market value, which is subtracted from the balance owed on your existing mortgage.
At Home Mortgage Lenders, Inc., we answer questions about Home Equity Lines of Credit every day. Call us: 8139881776.